Wednesday 12 October 2011 17.56 EDT
First published on Wednesday 12 October 2011 17.56 EDT

Predictable and predicted, the new surge in unemployment is upon us at last. During chapter one of the Great Recession, British national income dropped more sharply than for generations, and yet employment fell away at a mere third of this rate. The fear now is that this is catch-up time for the labour market, and it is a fear inflamed by government policy. Yesterday's figures recorded 114,000 extra people succumbing to involuntary idleness over the summer: victims of the superstition that if the state clears out of the way, private industry will automatically fill the gap. Yes, there are malign forces at play which Whitehall cannot control, notably the eurozone crisis. The detailed numbers, however, do not point to a purely imported disease. The most pronounced job losses were not in the regions most likely to catch colds from export markets, but in the north-east, where dependence on state employment is higher than anywhere else in England.

A degree of historical perspective is required. We are not yet back at the unemployment peaks of the 1980s, or even the 90s. The big question is how we can avoid re-scaling these sorry summits. It would help if the problem could be identified and isolated. But every caricature of the new unemployment is defied by the data. Yes, there are some signs of a north-south divide, but regional policy is an incomplete answer, seeing as London yesterday notched up a double-digit unemployment rate. Ahead of the figures there was talk of the particular problems of women. And they have indeed fared worse over the year, but in the most recent quarter men bore the brunt. The overall picture is not of some particular community, class or industry falling off a cliff, but rather of a whole nation slowly succumbing to grave depressive tendencies.

One problem nonetheless stands out – youth unemployment, which soared virtually 10% in just three months, to approach the million mark. The picture was clouded by job losses at the other end of the age range, after employers exploited a final chance to impose mandatory retirements which were outlawed this month. Older victims of this cull may never recover their individual working lives, but the phrase "lost generation" is increasingly applied to the youth as a whole. In the Commons, David Cameron promised his government would do "everything it possibly can", words which will have left young listeners cold. The coalition has scrapped the maintenance allowance for staying on at school, cut back on university places and abolished the future jobs fund. With nothing substantial in the place of these crushed opportunities, it ought to come as no surprise if increasing numbers of youngsters now have nothing to do. This summer's riots were an unmissable straw in the wind.

Faced with incomparably worse unemployment, Franklin Roosevelt said: "Do something. If it works, do more of it. If it doesn't, do something else." Britain's unemployed deserve the same spirit of urgent improvisation today. The future jobs fund was costly and imperfect, but four in 10 who went through were in work a year down the line. Even if some would have found work anyway, it beggars belief that all of them would. Rather than abolishing it, the government could have reformed it, and sharpened the incentives to get it right. More generally, the time for Rooseveltian invention is now. It is welcome that the chancellor is now talking about credit easing, but he stands no chance of getting this up and running on the requisite scale while pretending that it can be squared with his failing plan A. Instead, he should be upfront about the fact that this is radical stuff, which may draw the state into new territory of commercial finance, and blur the line between monetary and fiscal policy. Frightening? Perhaps, but no more than the alternative of standing idly by, while ever more of the workforce is compelled to do the same.